The enkephalin (ENK) gene was used as a model to study the molecular mechanism of phenotypic differentiation with special emphasis on the identification of novel DNA binding proteins and their cis-acting elements and on their role in far-distant DNA-DNA interactions and nuclear organization during neurodevelopment. Three nuclear proteins were identified that specifically bind to the novel octamer-like motif (TTTGCAT=sept) of the ENK gene; stem-sept was expressed in multipotent neuroglial stem cells; neuro-sept and glia-sept were found to be exclusive to proliferating neuronal and glial precursors respectively and needed to be phosphorylated to bind the DNA. Specific extent of DNA bending was observed following these protein-DNA interactions. Nuclear protein(s) that binds to both a far upstream (-2450 bp) AT-rich [(ATT)19] sequence and the proximal promoter / TATA region of the ENK gene was identified by a magnetic bead based "looping assay". The formation of the protein-DNA complex was found to be restricted to basal ganglia and cerebral cortex at the ages of P2 and P8 respectively and was found to be negatively correlated to ENKmRNA levels. The protein(s) was found to be highly charged and showed an unusually high affinity (approximately 10-12 M) to this AT rich region and also to (membrane) lipids. DNA binding was found Ca2+-dependent and required at least partially phosphorylated protein(s). Four proteins of MW approximately 200 kd, approximately 90 kd, approximately 40 kd and approximately 14 kd were identified by using a combination of UV-crosslinking, mobility shift assays and DNA affinity purification. The 14 kd protein which alone forms a high mobility protein-DNA complex with the AT rich motif was selectively enriched in protein extracts prepared from the nuclear matrix. Treatment of primary developing neuronal cortical cultures with distamycin resulted in an approximately 15-fold increase in ENKmRNA levels as quantified by quantitative (mimic) RT PCR. The mouse enkephalin gene was further characterized and several constructs with B-gal as reporter gene were made for transgenic studies using the Cre-lox based targeted insertion system. Efficient DNA transfer into various primary developing neuronal cultures were developed in combination with immunomagnetic sorting of transfected cells and DNA molecular decoy for functional studies.